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Bank of China publishes infographic explaining why Bitcoin is valuable and how its value keeps increasing

Bank of China publishes infographic explaining why Bitcoin is valuable and how its value keeps increasing

Samson Mow, the chief strategy officer at Blockstream, revealed on July 27, 2019 that the Bank of China has published an article that explains how Bitcoin works, and why its price keeps increasing.

An infographic on the bank’s website illustrates how Bitcoin came into existence, beginning with the release of its whitepaper in November 2008. The Bank of China’s website also notes that the first 50 Bitcoins were mined in early 2009 when the genesis block was produced.

Bank of China explains why Bitcoin’s value continues to rise

The bank’s infographic also points out that Florida resident Laszlo Hanyecz paid 10,000 BTC in 2010 for two pizzas. After covering basic information about Bitcoin, the Bank of China noted that Facebook is developing its own cryptocurrency, Libra.

According to the bank, Bitcoin’s value continues to appreciate due to its limited supply of 21 million, and it may serve as a store of value, especially for citizens of countries suffering from high levels of inflation.

Bitcoin is “virtual property”

On July 18, a court in Hangzhou, China clarified that Bitcoin qualifies as “virtual property”, which reaffirmed the nation’s stance that it’s legal to own the pseudonymous cryptocurrency. The court also said that bitcoin holders are entitled to legal protection in disputes.

Chinese court upholds legality of Bitcoin ownership, BTC protected by China’s property laws
Related: Chinese court upholds legality of Bitcoin ownership, BTC protected by China’s property laws

A study published by CoinShares in late 2018 revealed that approximately 60 percent of Bitcoin’s hashpower is generated in China. Meanwhile, researchers at Diar found that unregulated local crypto exchanges handled 60 percent of the world’s USDT trading volume.

While Chinese citizens may continue to find alternative ways to engage in crypto trading, the digital assets industry has been severely restricted by the nation’s authorities. In September 2017, China’s government placed a ban on local cryptocurrency exchanges and initial coin offerings (ICOs).

Due to these restrictions, Chinese residents may hold digital assets but might not have a convenient way to exchange their holdings for fiat currencies.

Chinese Bitcoin miners steal $3 million worth of electricity

China’s reserved stance toward cryptocurrencies may partially be attributed to a large number of scams and other illegal activities associated with them. On July 12, the Guardian reported that Chinese police officials had uncovered an illicit mining operation that was running on stolen electricity.

As detailed in the incident report, the miners had stolen $3 million worth of electricity to illegally mine Bitcoin. Authorities in Zhenjiang, a city located in eastern Jiangsu province, confiscated nearly 4,000 units of mining hardware from the illegal operation.

Update July 27 @ 10:16 pm Pacific time: A previous version of this article stated that the Bank of China was a central bank, which it is not. The article has been updated to reflect this fact.

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Omar Faridi

Omar Faridi

Journalist @ CryptoSlate

Omar enjoys writing about all topics related to Bitcoin, blockchain, and cryptocurrency. He is most interested in crypto regulations, quantum resistant blockchains, and Ethereum and Bitcoin Core development. His academic background includes an undergraduate degree in computer science from the University of Nevada and a masters of science in psychology from the University of Phoenix. He works as an application developer for the University of Houston and a data storage specialist for Dell EMC.

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